Our Cop27 Net Zero Atlas builds on our inaugural report to systematically assess climate targets and mitigation strategies of G20 countries'. It also includes analysis of physical climate risk exposure for each G20 country for the first time.
Within this year's report, we:
- Refresh last year’s evaluation of the ‘temperature alignment’ of national climate commitments and actions for G20 countries, taking into account new pledges from some of the largest emitters.
- Leverage our analytical tools, inclusive of our innovative sovereign 'Implied Temperature Rise' (ITR) metric, originally developed to assess climate risk for sovereign assets in fixed income markets.
- Add a baseline analysis of the physical risks affecting these nations, and the associated impacts on livelihoods, infrastructure, and the economy.
Our key findings (below) have important implications for financial markets now and in the years ahead. The transition and physical risks arising from climate change are already beginning to reshape economic growth trajectories and asset valuations. It’s increasingly important that institutional investors adapt both analytical tools and investment strategies to respond to these challenges.
- Incremental progress has been made as all G20 countries have set a mid-century target and all but Mexico are now targeting achievement of net zero emissions.
- G20 countries’ current climate policies (based on our collaboration with the International Institute for Applied Systems Analysis and the New Climate Institute) have seen some enhancements.
- G20 Nationally Determined Contributions (NDCs), on average, now align with a 2.7°C global temperature rise compared to 2.9°C last year.
- Current policies of several advanced economies are significantly off track when measured against their more ambitious NDCs.
- Risks will continue to escalate without rapid emissions reductions, with annual losses from disasters rising by 5% per annum for the last 30 years.
- By 2050, unmitigated climate change would result in a range of new or intensified risks, posing a significant economic and policy challenge for G20 economies.